Archive for the ‘economics’ Category

“We have been impressed by the great effort that your government has taken to improve the living standards of the majority of Venezuelans. … what Venezuela has been able to achieve in so little time will be a source of inspiration and ideas for many in Australia.”

Phillip Adams – Journalist, Republican of the Year 2005

I wonder what these people are now thinking of the reports coming out of the tragic Venezuelan basket case. Pity we missed out on the advice Hugo would have been able to give us on running an economy had he visited Australia as the below signatories had desired.

We, the undersigned citizens of Australia, would like to extend a warm invitation for you to visit our country. We have watched developments in Venezuela with great interest. We have been impressed by the great effort that your government has taken to improve the living standards of the majority of Venezuelans. We have also noted with keen attention the moves that your government has begun to make to create a society based on popular participation in all spheres of society—from the workplace up to the national government.
Although we are on the opposite side of the globe we feel that our shared ideals of social justice and democracy bring us close together. Every country has its own traditions and culture and has to find its own solutions, but what Venezuela has been able to achieve in so little time will be a source of inspiration and ideas for many in Australia.

In this light we believe that a visit to our country by yourself would not only help to improve the awareness of the Australian people of developments in Venezuela, but also be an unparalleled opportunity to strengthen the ties of friendship and solidarity between our two peoples.

He gives a compelling list of problems which, when put together, looks very much like a slow motion train crash.

His outline includes: less democracy, more autocracy; Switzerland delinking from the Euro as the European Central Bank starts to print one half to a trillion extra Euro, UKIP and Le Front National parties topping recent elections over all other parties in both the UK and France, seriously unsustainable welfare, an imminent election in Greece, and, as icing on the cake, the little problem of the religion of peace:

The year that started with a massacre in Paris, followed by deadly combat between Islamists and police in France and Belgium, is going to deliver a rolling salvo of shocks for the great experiment of European unification.

A free society is one that is willing to place millions of small bets on persons unknown and things unseen.

A fascinating end of year reflection on the sometimes forgotten creative power of American individualism and freedom comes from Bret Stephens in the Wall Street Journal. Essentially based on private property rights, Stephens asks what we might consider to the be the most influential innovations in the early 21st century, the equivalents of the Model T Fords, the Wright brothers and Penicillin in the last century?

On the top of his list is fracking. It has made America the world’s leading oil and gas producer, turned the energy markets upside down and paradoxically, reduced the US’s greenhouse gas emmissions to below 1995 levels. And for good measure, it has undermined the success of renewables. .

Fracking happened in the U.S. because Americans, almost uniquely in the world, have property rights to the minerals under their yards. And because the federal government wasn’t really paying attention. And because federalism allows states to do their own thing. And because against-the-grain entrepreneurs like George Mitchell and Harold Hamm couldn’t be made to bow to the consensus of experts. And because our deep capital markets were willing to bet against those experts.

This is a paean to free markets, individualism and anarchic creativity.

Innovation depends less on developing specific ideas than it does on creating broad spaces. Autocracies can always cultivate their chess champions, piano prodigies and nuclear engineers; they can always mobilize their top 1% to accomplish some task. The autocrats’ quandary is what to do with the remaining 99%. They have no real answer, other than to administer, dictate and repress.
A free society that is willing to place millions of small bets on persons unknown and things unseen doesn’t have this problem. Flexibility, not hardness, is its true test of strength. Success is a result of experiment not design. Failure is tolerable to the extent that adaptation is possible.

This is the American secret …We are larger than our leaders. We are better than our politics. We are wiser than our culture. We are smarter than our ideas.

How many bad predictions does it take to disbelieve climate scientists?

In a published letter in Nature Climate Change on 22 December, it was report that global warming is already slowing yield gains at a majority of wheat-growing regions throughout the world. The researchers tested 30 computer models … to establish the most likely scenario.

But in the real world it is reported that:

Global wheat production set new records in 2013 and 2014 …Not only are global wheat yields not declining, they are rising at a spectacular pace. According to objective US Department of Agriculture data, global wheat yields have risen by 33 per cent since 1994.

But the Nature Climate Change report with its 30 computer models assures us:

In recent decades, wheat yields had declined in hotter sites such as in India, Africa, Brazil and Australia …

But in the real Indian world it is reported that:

Indian farmers are poised for a record wheat harvest this year of 96 million tonnes, up some 3.5 million tonnes year on year and beating the previous record of 94.9 million tonnes set in 2012, the US Department of Agriculture’s New Delhi bureau said.

And Brazil?

Harvest of the 2014 wheat crop is almost concluded. Early official estimates point to a bumper crop of almost 7.5 million tonnes, or 30 per cent above last year’s good level and record …

And Africa?

Wheat production in Egypt has quadrupled during the past three decades, with the past 10 years producing the 10 highest wheat crops in Egyptian history … Africa’s second largest wheat producer, Morocco, produced its largest wheat crop in history in 2013 … South Africa also produced record wheat yields in 2014 …

And finally Australia?

This year’s Australian wheat crop … is nearly four times as large as the 1972 wheat crop.

He has repeatedly savaged free markets and aligned himself with the views of Thomas Piketty, the far-left intellectual who obsesses about inequality and advocates crippling taxes on income and wealth.

Apparently, the Pope believes that the absolute autonomy of markets is a new form of tyranny.

It was a strangely inaccurate vignette of the modern economic system, which is characterised by not-so-free markets that are routinely bailed out, subsidised, taxed, capped, fettered, regulated and distorted by activist governments and their monetary and fiscal policies. North Korea is a genuine tyranny; free trade and genuine free markets are anything but.

The Pope’s fundamental error, as is that of socialist thinking generally, is that “inequality is the root of social evil”. This logic leads to directly to the idea that it is:

“evil” for the likes of Sir Richard Branson to have been allowed to keep the money he earned by providing the public with goods and services, and that we need immediate equalisation through punitive taxes. Such an extreme approach would have catastrophic consequences, annihilate incentives to work, save and invest, and halt the progress of human civilisation.

Heath points out facts that many seem to ignore; that human prosperity has increased astronomically worldwide and absolute poverty has been halved in a few decades. It reminds me of Matt Ridley’s The Rational Optimist, which outlines just how extraordinary has been human progress in wealth creation, for everyone, everywhere.

Heath concludes,

But unthinkingly to fight capitalism – the greatest alleviator of poverty and liberator of people ever discovered – makes no sense. The sooner the world’s great religions learn to love the wealth-creating properties of the market economy, the sooner they will be able to harness them to make the world a better place.

How the ABC slaughters our Australian industries

An interesting letter has been circulating about the ABC Four Corners programme on our live beef export trade to Indonesia. Not content with the normal political bias, Four Corners did a disgracefully biased demolition job that, with the ensuing Gillard government’s mindless and destructive decision to stop all exports, will create an enormous amount of damage to the beef industry in both Australian and Indonesia. But these ABC employees have no regard for consequences.

I am writing to you after the Monday program to say that although I abhor the treatment of the animals shown in the video, your one sided approach to the subject and the possible effect of that of a ban on live exports is too big a price to pay for a report based on the evidence of an organization that’s charter is to shut us down. I have the following points to make. I would like to have the same time as those who denigrated my life to show you the other side of our industry. To show you what is really going on. In Australia there used to be thing about “A fair Go”. You have gone with images provided by one person followed up by your investigative journalist who spent a week in Indonesia. Your report makes out that close to 100% of Australian cattle are treated as was shown on TV.

Another feather in the hapless ABC’s hat. The worst is that I am sure the Four Corners’ producers are thrilled at their destructive power.

What freezing weather?

More in the litany of waste, expense, taxes and ineffectual action on climate change from Christopher Booker of the UK Telegraph. We can only pray that Australian doesn’t go further down this destructive road.

Back in Britain we had the latest report of the Climate Change Committee, set up under the Climate Change Act, chaired by Lord (Adair) Turner. This bunch of academics now proposes that Britain should lead the world by cutting its carbon emissions by 60 per cent in the next 20 years. One of the chief ways to do this, says Lord Turner, will be to ensure that there are 11 million electric cars on Britain’s roads by 2030. Quite how 11 million motorists will be persuaded to pay more than £20,000 a time for these vehicles when, for little more than half that, they could buy a Ford Focus, Lord Turner does not say.

The warminists never cease to impress on us how hot the last decade has been, how this summer will be another killer, or how dry winter was going to be. So it is fair to remind them, as Booker does, that in England, the “last week of November and the first of December was the coldest ever recorded since the measurements began in 1659”. Or that in Scotland, the army was called out because the “country ground to a halt in up to three feet of snow.” Or that at Cancun, where the experts were saving the Earth, “six days running, local temperatures also fell to their lowest, for the date, since records began 100 years ago”.

Doesn’t matter. They don’t take any notice. Lord Stern wants to “raise an extra £15 billion a year in ‘green taxes’” to give to the third world for them to build wind turbines. Read all about this destructive folly.

Water tanks would cost nearly 200 times more…

Jon Faine, spruiking Green policies on the ABC yet again this week, promotes the mandating of rain tanks for Melburnians. This desire of his underlines the economic and mathematical illiteracy of the Left. They can’t do sums, and have no idea of real costs to real people, most of whom can simply not afford the luxuries they indulge in themselves.

From my reckoning [figures from official government websites]:

The average total cost of a 5,000 litre tank is around $3,137.

For a Melbourne population of 4,644,950, there are 1,667,687 households. Therefore, the total price for mandating rain tanks would be approximately $5 billion and they would store a potential 8,330 ML of water.

The dam that Labor has refused to build, the Mitchell Dam, would have had a capacity of 500,000 ML. That is, one dam, costing around $1.5 billion — that is a third of the cost of rain tanks and equivalent to just three years of operation of the $5 billion desal plant — would have stored 62 times more water. This is, dollar for dollar, nearly 200 times more water for the money spent. Or to put it another way, Faine’s planned mandated water tanks, if they were to do what this one dam could do for $1.5 billion, would cost individuals the equivalent of $180 billion.

In addition, the proposed mandated rain water tanks would, in a drought, last an average household — at 155 litres per person — only two or three weeks. The one extra dam would supply water to Melbourne, at the same rate — for around two years.

Maybe households in Fitzroy can afford this nonsense but it would either hurt the poor, or if subsidized, overwhelm the taxpayer. Either way, it is crazy economics and utterly stupid as a way of waterproofing a city like Melbourne. But do the fanatical greens care at all ?

Greens turning a dirty grey

At last, the Greens seem to be getting it in the neck. It is not just the outcome of the Victorian election but analysis of their policies and who they represent. The commentators are moving in and exposing them as the dangerous extremists that they are. A serious analysis of the policies and the allegiances reveal something less pure than saving trees and saving the planet.

Many are now suggesting that Julia Gillard take urgent action to distance herself from the Greens and their toxic policies.Janet Albrechtsen suggests

Labor can expose the Greens as a party with a BANANA agenda (build absolutely nothing anywhere near anything).

A couple of weeks ago Greg Sheridan likened the reverential welcome the ABC extends to Bob Brown as if he were an Anglican Bishop from 50 years ago. He analysed their website and was scathing about their policies.

However, a cursory stroll through the Greens website shows just how extreme and destructive their ideology is. It’s built on a hatred of modern Western society and as such is the logical successor to the Communist Party, just as many Greens were former communist activists or their progeny.

The Greens are a fraudulent brand. There are not enough letters of the alphabet to encompass the image fraud this party is perpetrating on the electorate. It is simply not a party preoccupied with the environment.

Sheehan takes us letter by letter through the sins of the Greens. It is a wonderful summary. People are indeed starting to understand that the love of nature can have impurities.